The rise of Islamic extremist
terrorism has obscured a fundamental shift in Islam: The emergence of an
increasingly conservative Muslim mainstream. In the years to come, orthodox
Islam will profoundly influence everything from politics to the economy in
Islamic nations, especially Indonesia. For moderates, the challenge will be to
rescue Asia's traditionally tolerant brand of Islam. That struggle is only
beginning

By Michael Vatikiotis/JAKARTA, BANDUNG and KUALA LUMPUR

Issue cover-dated December 11, 2003

ON A QUIET LATE
AFTERNOON towards the end of the holy month of
Ramadan, Jakarta's Sunda Kelapa mosque slowly fills with worshippers. They come
freshly washed and barefoot, as their religion demands. Finding a spot they
begin to pray, women on one side, men on the other. By the entrance a smartly
dressed woman chats away on her mobile phone. Nearby, a group of girls, who have
slipped on white shawls and sarongs over their jeans and T-shirts, kneel
quietly. Leaning against the wall a few older men read from pocket-sized Korans
and murmur verses; some younger men are sprawled out fast asleep.

It is as a mosque should be--a place of peace
and contemplation, where a Muslim can reflect and be close to God.

The tranquillity is deceptive. For it belies a
deeper struggle for the soul of Islam that is pitting Muslim against Muslim
across much of Islamic Asia and has helped produce violent militant movements
that have brought terrorism to the region.

Once regarded as havens for a moderate and
tolerant brand of Islam, Indonesia and Malaysia are in the throes of a struggle
between moderates and conservatives. The moderates seek pluralism and
accommodation, a form of Islam that steers away from the sort of orthodoxy that
discriminates against women and non-Muslims, and embraces democracy. The
conservatives demand a legal system governed by sharia, or Islamic law.

This is not a debate between the mainstream and
extremists, but one between moderates and an increasingly large, increasingly
conservative swath of society that has emerged across the Muslim world--from the
southern Philippines to Central Asia.

The outcome of the struggle has profound
implications, not just for security, but also for economic progress and
political stability in the region. Should the conservatives prevail in
Indonesia, it could provoke conflict with the country's sizeable non-Muslim
community, produce a foreign policy more sharply critical of the West, and an
investment environment less friendly to non-Muslim investors--not to mention the
local Chinese business community. It would also ensure a steady stream of
potential recruits for radical groups like Jemaah Islamiah.

"The conservatives are a real threat," says
Agus Widjoyo, a retired Indonesian army general who oversaw the army's
territorial command structure. "This creeping strategy of Islamization could
alter the basis of the Indonesian state."

The Argo Gede express rolls out of Jakarta's
Gambir station and dashes across a plain of rice fields towards the foothills
around Bandung. Flurries of green flags and banners testify to the fact that
West Java is Indonesia's Muslim heartland. In one district, Cianjur, the local
district chief was recently elected on a promise to implement sharia.

"Why not?" asks Kemal, a radio journalist from
Bandung sipping tea and smoking clove cigarettes in the train's dining car.
"Indonesia is an Islamic state--the majority of us are Muslims." For Kemal, as
an orthodox Muslim, Western notions of separating the spiritual and the secular
are irrelevant. Sharia is a matter for God, he says. "It has nothing to do with
the government."

Kemal is one of an increasing number of Muslims
in Indonesia--and Malaysia--who have embraced orthodoxy in recent years. They
are not just the poor or the marginalized, but people from the mainstream--often
middle class and often with Western education. One Indonesian financial analyst
living overseas recalls coming back to hear his cousin, an engineering professor
educated in Europe, tell him that the country was in a mess because the
government had strayed from the true path of Islam. For Kemal, Islam's
attractions are simple: "People like me are looking to religion to help us
improve our lives."

That response is not surprising. In Indonesia,
the transition to democracy since 1998 has done virtually nothing to improve the
well-being of the majority of people. The government claims to have stabilized
the economy and secured annual growth of almost 4%. But critics point to rising
prices and rampant corruption. At the same time, political freedom has allowed
proponents of conservative Islam to propagate their orthodoxy.

"The meaning of religiosity to the majority of
people is the quest for justice, for freedom and democracy," says Zuhairi
Misrawi, a young Muslim intellectual, who actively campaigns for religious
tolerance. In Malaysia, Syed Azman Syed Ahmad, a member of parliament from the
opposition Parti Islam Se Malaysia, or Pas, sees the same thing. "Those who
believe the Islamic system is best are those who see Islam as a solution to
social problems."

As Syed Azman points out, many individuals now
in prominent positions in society are among those swept up in the conservative
tide. Often educated overseas in the 1970s and 1980s, they became frustrated
with the political system at home and mingled with students from Arab countries,
which imbued them with the notion that Islam is the solution to their problems.
"I'm worried about the focus on madrassas [conservative Islamic schools] as a
source of extremism," says Syed Azman. "A lot of the extremists are from
mainstream, professional walks of life."

The spread of conservative Islam is also
receiving help from an unexpected quarter: the United States. U.S. policy in the
Middle East and the harsh treatment of Indonesian citizens as security risks in
the U.S. is a source of widespread anger. Popular Muslim preacher Abdullah
Gymnastiar (better known as A.A. Gym) peppers his sermons with homilies on
tolerance. Yet he refused to meet U.S. President George W. Bush on his recent
brief stopover in Bali in October. "America has nothing to fear but the effects
of its own policies," he said in an interview.

Such views have nationalist implications and
are helping to reinforce Muslim identity. On the train to Bandung, radio
journalist Kemal gives voice to this anger: "America is destroying the world. It
is trying to divide us and create conflict here in Indonesia by creating these
terrorist groups."

Syafi'i Anwar is executive director of the
International Centre for Islam and Pluralism, and preaches at small mosques in
Jakarta, where middle-class worshippers tell him that the U.S. is the biggest
enemy of Islam and that the Koran justifies protection against attempts by Jews
and Christians to undermine Islam. "This state of mind is spreading," he says.

How? As Syafi'i Anwar points out, a hardline
Muslim-affairs magazine, Sabili, now has a circulation of more than
145,000--higher than any other news magazine in Indonesia. The media are a
lightning rod, adds Syed Azman. "For less than a dollar people can access the
Internet and this has changed everything."

Take a tour of the plethora of Islamic Web
sites. One run by the Justice Party, a small but increasingly popular Islamic
grouping, asked surfers if all places of entertainment should be closed during
Ramadan--97% of the 990 respondents said yes.

Such calls aren't just the preserve of minority
Web sites. Mirroring the wider social shift towards orthodoxy are the actions of
clerics and politicians--mild-mannered and smooth-talking, but determined
nonetheless--who are using legitimate political means to pursue their
conservative agenda.

This year, for instance, Jakarta's city
government enforced a ban on restaurants serving alcohol during Ramadan, and
most clubs and bars outside hotels closed for the month. In past years this
happened on a voluntary basis; today the instant fine, according to one
restaurant owner, is 100 million rupiah ($12,000).

Nationally, a new education law passed earlier
this year mandates religious instruction in all schools. There may be more--much
more--to come: Proposed amendments to the criminal code in Indonesia introduce
elements of Islamic law such as a ban on cohabitation, pre-marital sex and
sodomy. A draft health bill offers Muslims the right to be treated only by
Muslim doctors.

Most worrying for moderates, a draft law on
religious tolerance includes articles that would ban mixed religious marriages
and adoptions.

Asked about the law, a prominent Muslim scholar
and leader of the People's Consultative Assembly, Amien Rais, insisted it would
fail. "It is impossible to transform this state into a sharia state. They will
be outvoted." Indeed, a common refrain from Indonesians is that radical and
fundamental ideas of Islamic statehood themselves pose no threat to society at
large. "On the contrary," writes well-known television broadcaster Desi Anwar,
"they are to be welcomed as testimonies to a vibrant and pluralistic democratic
life that Indonesians have been denied of for so long."

Still, experienced politicians like Marzuki
Darusman are worried. A senior member of the secular nationalist Golkar party,
he describes the proposed tolerance law as "dangerous" and points to a more
Islamically inclined bureaucracy that is pushing through an Islamic legislative
agenda. Combine this, he says, with all the major political parties fishing for
Muslim votes ahead of next year's election, and there is the possibility that
some of this legislation will pass.

In truth, the roots of Islamic statehood run
deep in Indonesia and Malaysia, having little to do with external radical
influences. In Malaysia, Pas has been campaigning for Islamic statehood since
the 1950s. In Indonesia, hardline Muslim nationalists pushed for an Islamic
state with the declaration of independence in 1945. They failed, but have tried
repeatedly over the years to win their case. It was out of this conservative
movement, spearheaded by the Masyumi Party, that radical movements like Jemaah
Islamiah developed. "This isn't cyclical, it was merely pushed underground and
has resurfaced," says Sidney Jones of the International Crisis Group in Jakarta.

Today, the Masyumi hard core is quietly
regrouping. They include figures like Justice Minister Yusril Izha Mahendra,
leader of a minor Islamic party called Star and Crescent, which supports the
introduction of sharia.

A national dialogue of Muslim clerics held in
October agreed that sharia is the answer to Indonesia's problems and urged
Yusril to strengthen efforts to introduce legislation "as part of the effort to
gradually introduce sharia in the predominantly Muslim country." More than 67%
of Muslims polled in a survey last year said they supported sharia as a basis of
government. More than half the sample said they had voted for secular
nationalist parties in the 1999 election.

Optimists point out that a move to have sharia
embedded in the constitution failed at the annual session of the People's
Consultative Assembly in 2002. But moderates remain concerned. Comments Syafi'i
Anwar: "They have abandoned the strategy of implementing sharia within the
state, and instead are working at the local level."

To gauge where this creeping Islamization is
taking Indonesia, consider what's happening in the economy. As of April this
year, the Faculty of Economics at the University of Indonesia started teaching a
course in sharia economics. Bank Indonesia, the central bank, plans to expand
the Islamic banking system and will relax a ruling that stipulates that
conventional banks must provide separate premises for Islamic banking
operations. With Islamic banks boasting higher
loan-to-deposit ratios and lower default and nonperforming-loan
levels, economists say the central bank is happy to expand Islamic banking in
response to growing popular demand.

More worrying for moderates is the possibility
that mainstream political parties will pander to popular feelings and concede on
Islamic issues to win votes. "There's definitely a shift in Indonesian politics
towards conservative Islam," says Farish Noor, a Malaysian Islamic commentator
currently doing research in Indonesia. By harnessing Islam to undermine
President Megawati Sukarnoputri, he argues, "they are empowering people who
should be marginalized."

For the rest of the region, the rising tide of
Islamic anger and activism is a growing concern. In Singapore it has alarmed the
largely non-Muslim and Chinese population and helped reorient trade and
investment ties northward towards Thailand. Singaporean leaders fret about
Jakarta's reluctance to ban extremist movements like Jemaah Islamiah. "What has
not been done sufficiently in my view--and this is a difficult question--is to
go for the queen bees," Prime Minister Goh Chok Tong said in a recent interview.
"Because unless you can neutralize the queen bees, they will be pouring forth
the poison through their followers, the worker bees."

The moderates, though, are fighting back.
Liberal Islamic networks are using some of the same methods as the
conservatives, passing out pamphlets in mosques and deploying intellectuals to
influence the sermons given in mosques every Friday. There is a new Islamic
magazine that looks just like the hardline Sabili, but espousing pluralism
instead of conservatism, and a liberal Islamic radio station that boasts an
audience of 5 million. But it's a tough battle. "This is a crucial moment and
there are dangers," says Robin Bush, an American scholar who heads the Islam and
civil society programme at the Asia Foundation.

The moderates' biggest fear is that, in the
interest of winning votes in next year's elections, Indonesia's leaders will not
uphold pluralism. While many of the same pressures on governments to Islamize
exist in Malaysia, the new prime minister, Abdullah Ahmad Badawi, is
well-equipped to take on the conservatives. As an Islamic scholar he can deploy
the Koran just as effectively as the conservatives and argue for tolerance and
moderation. And that's a new reality for the region says Karim Raslan, a
Malaysian writer and commentator. "If you're going to be a moderate, secular
Islamic leader, you need the scriptural knowledge, because the reality is that
religion and the state are no longer separate."